PwC enters talks with top Madrid firm in move to become number three in Spain

Big five accountant Pricewaterhouse Coopers is in merger talks with 52-lawyer Madrid firm Estudio Legale to create the third largest national firm in Spain.

The merger will be the second between a Big Five accountant and a law firm after J&A Garrigues and Arthur Andersen joined forces to create a 550-lawyer firm in January 1997.

Paul Downing, Pricewaterhouse Coopers head of corporate development and legal, said: “In Spain our strategy is to merge with a further top quality law firm in the shortest possible time.”

If the deal goes ahead, Estudio Legale will link up with the existing Spanish law firms owned by Price Waterhouse and Coopers & Lybrand to create a firm turnover of nearly 6bn pesetas – second only to Garrigues Andersen’s 10.31bn.

Sources said Pricewaterhouse Coopers may take on partners from the 60-lawyer Barcelona firm Mullerat & Roca, but will face competition from Allen & Overy, Linklaters, Clifford Chance and Freshfields which are also thought to be interested.

Mullerat & Roca managing partner Roser Rafols said the firm would not join any association with Estudio Legale.

Sources close to the deal said the firm may split into two factions – those in favour of a merger and those against.

The move is the latest sign that the legal profession in Spain is rapidly contracting from small regional practices to larger national and international firms.

Meanwhile, Uria & Menendez, which rejected the offer to join Linklaters & Alliance in summer, has acquired 20-lawyer Madrid firm Bufete Armero. Half of the firm’s lawyers will join Uria’s litigation department and the rest will go to the firm’s corporate practice. Senior partner Rodrigo Uria said the firm’s litigation department would be strengthened by the 10 lawyers from Bufete Armero.

In July, Spanish rival Cuatrecasas snapped up Bufete Armero corporate partner Federico Roig and tax partner TomAs Olalde.